The President, Megawati Soekarnoputri, is still the front-runner in the 2004 presidential election, but her party, the Indonesian Democratic Party-Struggle (PDI-P), looks likely to lose seats in the April parliamentary election. If Ms Megawati is re-elected, she might struggle to control parliament without a strong PDI-P lobby. Economic policy initiatives will be largely on hold untill after the extended election period in 2004, but broad macroeconomic stability is expected to be maintained. Real GDP growth is expected to rise to 4.6% in 2004, owing to stronger export demand, before failing back to 4.2% in 2005 as import demand grows strongly and exports suffer from failing competitiveness. Inflation is forecast to fall gradually over the forecast period, and the rupiah is expected to appreciate gradually in 2005. The trade and current-account balances will remain in surplus throughout 2004-05.